What To Expect For A Dealer When You Have Bad Credit?

So you have been recently divorced, bankrupt, or consolidated your loan

. But you need a vehicle to get to work, so naively you walk into a dealership try to buy a new or used car. Everything seems like smooth sailing on the surface. You test drove your next new car, you didn't even haggle with the sales person thinking you didn't want to jeopardize your chances of approval. You filled out a credit application and talked to the finance manager. All the smiling faces and nothing indicated you could be in trouble soon. So you think to yourself, hey maybe I really pulled it off this time. Maybe just maybe I will be approved soon and will be on my way with my new car. Your sales person informed you it may take up to 24 hours to get your approval from the head office, so you patiently wait for the answer. 24 hour goes by quickly, and no word of your approval from your sales person. So you think, probably he or she just simply busy and forgot to inform you. On the second day, you phoned in to the dealership looking for answers, and your sales person says he or she will look into it for you, they haven't heard anything from their business manager. But reassured you will be approved shortly. On the third day you called in again, and this time the sales person says maybe it will be a good idea to speak to the finance manager directly. So you call back the main phone number, ask for the finance manager's extension. Only to find out he is not at his desk, so you leave a message. On the fourth day you still didn't get a call back, so you try again with another voice mail. Perhaps after a week you finally had enough and walk back into the dealership demanding for an answer, but informed by the receptionist the finance manager can't see you right now, he is busy! If this horrible experience sounds familiar to you then you are not applying to the right car loan provider.

To continue our story above, after a week of waiting, you finally got an answer from the dealer. Your sales person informs you are approved for the loan, but not at the low interest rate you expected. At that point usually you will be so desperate to get a car, you wouldn't even care for the interest rate anymore. By the time you sign the paperwork you could be locked in for 18% interest. But you are just happy you got a car, and didn't care if you can save money, after all your car is a necessity to your living. Tip of advice, you should pay close attention to the contract terms and loan provider. Take down their phone number, and remember their contact information. Make your payments on time, even at these interest rates, wait for at least 12 month. After that call up your loan provider and speak to them regarding lowering your interest rate. If they reject your request then it is time for you to seek out another provider, but ask your current lien holder for the amount of the loan outstanding so you will know how much loan you need. Find your next bad credit loan provider and request for that loan amount. Do everything in your power to provide your next loan provider with all the requested documents, and information. And if you are approved for a lower interest rate such as 15%, then you simply request your new provider to pay out the lien on your behalf.

Another tip to remember is not to apply to too many loan providers in a short period of time. This behavior is called "credit seeking" or "credit hunting", it is probably the worst thing you can do to yourself. In the next series of articles we will explore this little further.

by: Rick Li

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